Blender 2.8 bake node displacement as UV
The correct way of using Displacement in Material Output node is through Displacement node (Vector->Displacement) and connecting image to the Height input. But even that way I believe Displacement in node editor doesn't work in Eevee, only in Cycles in rendered view. In Eevee it only shows up as bump. The only way to get Displacement in Eevee is by using Displace modifier.

Clarifications for baking color:


Then you click New on Image Texture to create new texture. Switch Render Engine to Cycles, set options for baking color:



Click Bake, wait to complete, then get to image editor where you select your image from dropdown at the top and save it as (Shift+S).